Editorial

Completing the Jigsaw Puzzle of Workers’ Participation

The complex processes and structures that underpin workers’ participation have been likened to a jigsaw puzzle that is gradually being pieced together in companies across Europe. One part of this still unfinished jigsaw puzzle concerns the need to embed workers’ participation at the European level into information, consultation and negotiation processes at the local and/or national level. Another part of the jigsaw puzzle concerns the potential to establish connections between board-level employee representation on the one hand, and information and consultation on transnational issues which takes place within SE-Works Councils and European Works Councils on the other. more

By Aline Hoffmann. In October 2012 Aline Hoffmann succeeded Bruno Demaître as Coordinator of the EWPCC.

Worker Participation – Transversal issues

The Euro-area crisis and the austerity policies prescribed by European institutions have led, in many EU countries, to systematic attacks on social dialogue and labour law provisions. More than 545 social and labour lawyers have signed a manifesto in protest at these developments. In the body of this document, signatories urge the European Union to respect and promote fundamental social rights, particularly in the context of crisis-related policy measures. more

European Parliament calls for an EU legal act on workers’ involvement, anticipation and management of restructuring

Following the lack of legal initiative from the European Commission on the issue of anticipation and management of restructuring, the European Parliament adopted on 15 January a resolution calling for a legal act based on a series of recommendations drawing upon MEP Alejandro Cercas’ report. The recommendations adopt a stakeholder approach to strategic workforce planning, with strong emphasis on workers’ involvement in the anticipation and conduct of restructuring, driven by the principle according to which redundancies have to be considered as a last resort only after due consideration has been given to possible alternatives.

The EESC adopts an own-initiative opinion on employee influence and participation

On 20 March, the European Economic and Social Committee adopted an own-initiative opinion on ‘Employee involvement and participation as a pillar of sound business management and a balanced approach to overcoming the crisis’. Drawing upon the concept of the “Sustainable Company”, the EESC advocates a stakeholder-oriented approach to corporate governance whereby economic, social and environmental goals are mutually constitutive of long-term company development. One key policy recommendation in this regard rests on the consolidation of employee involvement rights both at national and European level through a European framework directive.

European Works Councils (EWC) / Transnational Company Agreements

Almost finished: Implementation of the EWC Recast Directive

The transposition of the EWC Recast Directive into national legislation is coming to an end. Since the previous edition of the News Bulletin, Luxembourg has also implemented the provisions of the new recast directive. According to the European Labour Law Network the principle of ‘all the Directive, nothing but the Directive’ (1:1) was once again applied by the Luxemburg legislator. Liechtenstein has completed the transposition process as well. Consequently, of the 30 countries of the European Economic Area to our knowledge only Iceland has not yet adopted a transposition law.

Fallback provisions prove to be the blueprint for negotiations

The ETUI’s Benchmarking Working Europe 2013 shares preliminary findings based on the recently completed content analysis of EWC agreements. The ETUI finds that despite a considerable variety of company profiles and the influence of highly diverse national systems and traditions of industrial relations the basic architecture of rights and the practical arrangements found in EWCs have become increasingly similar. The data demonstrate that the existence of fallback provisions has clearly strengthened employee representatives’ position in negotiations, enabling them to effectively ‘bargain in the shadow of the law’. It also suggests a very strong learning effect: successive generations of negotiators have not only learned from mistakes made but have also built upon the successes of their colleagues in other companies. For details see chapter 6 of the report.

European Company (Societas Europaea, SE) / SCE

New EU Action Plan suggests no major revisions of the SE legislation

The new Action Plan on EU Company Law and Governance, published on 12 December 2012, contains no proposal for revising the SE Directive or Regulation. Instead, it is stated that the Commission will try to promote and improve ‘awareness of the European Company (SE) and the European Cooperative (SCE) Statutes’. Specifically, on page 14 of the Action Plan: ‘The Commission will, in 2013, launch an information campaign to increase awareness of the European Company (SE) Statute through a comprehensive website bringing together practical advice and relevant documents on the Statute and will examine how a similar action can be undertaken for the promotion of the European Cooperative (SCE) Statute.’

News on European Companies – 1766 SEs registered across the EU

The ETUI’s SE Database has published its latest figures on European Companies. As of 1 April 2013 1,766 SEs were registered across the EU. In total, 25 countries of the European Economic Area (EEA) host European Companies; only Bulgaria, Greece, Iceland, Romania and Slovenia still host none. The Czech practice of ‘SE mass production’ is continuing: at least 150 SEs were set up in the first three months of the year. 244 SEs have been identified by the ECDB as having more than five employees. De facto, their number is likely to be significantly higher, however. more

The idea of the SE is to provide a company with a large degree of flexibility and mobility within the European internal market. For this reason, the SE can transfer its seat to a different EEA member state. This transfer of seat does not result in the winding up of the SE nor in the creation of a new legal entity (SE Regulation, Art. 8). In the meantime, 67 SEs have moved their seat to another country. At least 21 belong to the group of normal SEs. To date, no case is known in which the transfer of seat has resulted in a reduction or withholding of participation rights. more

The SE Regulation provides for four different modes of SE establishment: merger, holding, subsidiary and conversion SE. As of 01.04.2013 the ECDB data reveal that 1,370 SEs (78%) have been set up by way of subsidiary, 146 (8%) by conversion, 90 (5%) by merger and only 13 (1%) by creating a new holding company. For 147 (8%) SEs the form of founding is unknown. The dominance of (initially employee-free) subsidiary SEs can be attributed largely to the creation of shell/shelf companies, especially in the Czech Republic and Germany. The prevalence of subsidiary SEs represents a creeping threat to worker involvement rights. It must be borne in mind that mechanisms for securing employee rights to information, consultation and participation are guaranteed only at the moment of founding of SEs. more

European company law and corporate governance

New EU Action Plan on company law and corporate governance plans stick to shareholder paradigm

In December the European Commissioner published the long-awaited EU Action Plan on European Company Law and Corporate Governance. The sixteen proposals contain little in the way of correcting the power imbalance that currently exists between shareholders, on one hand, and stakeholders (particularly employees), on the other, in the governance of European companies. Proposals for strengthening stakeholder voice (for example, through worker participation) are sorely missing from the Action Plan. The final proposal for ‘codification of EU company law’ is also likely to raise concerns, given that similar initiatives (for example, simplification) have been used to create downward pressure on standards already achieved. more

Commission consultation on the cross-border transfer of registered seats closed

DG Market has carried out an online consultation on the cross-border transfer of registered seats as part of its new Action Plan on corporate governance and company law. The online consultation was open until 16 April 2013. Most of the questions were aimed at companies and seem to be an information gathering exercise: for example, has the company recently transferred its seat, what was the cost and so on. However, some questions dealt more with subjective attitudes and are aimed more broadly at respondents other than companies. Particularly important for worker participation was the question of how the issue of employee participation should be optimally solved in the case of a transfer of a registered office. more

Consultation on Long-Term Finance opened

On 25 March 2013, the European Commission published a Green paper on the long-term financing of the European economy and announced a three-month public online consultation on this issue. This consultation addresses the causes of short-termism and possible measures that could be taken to encourage more long-term investment in Europe. In all, the Green paper contains 30 questions, including topics such as the definition of long-term finance, the functioning of different types of financial institutions (including development banks and pension funds), and the probable impact of changes in financial regulation. However, the consultation gets closer to worker participation issues in a set of questions on corporate governance and information disclosure by companies. The consultation runs until 25 June 2013 and can be found online.

A step but not a leap: The Commission's new proposal for non-financial and diversity reporting

On 16 April the Commission released its long-awaited proposal for a Directive regarding disclosure of non-financial and diversity information. The Commission’s explanation of the motivation for this proposal is straightforward: “...only a limited number of EU large companies regularly disclose non-financial information, and the quality of the information disclosed varies largely, making it difficult for investors and stakeholders to understand and compare companies’ position and performance.” Furthermore, many companies are subject to “group think” due to insufficient diversity in their boards, which leads to resistance to innovative ideas and a negative impact on company performance. To remedy this problem the Commission proposes that companies with 500 or more employees be required to report information on their social, environmental and board diversity policies and performance. more

Legislative work on gender-balanced boards on track

Mid-January, the European Commission announced that the proposal for a directive improving the gender balance on corporate boards passed the subsidiarity test as the number of national parliamentary chambers that opposed it (from the Czech Republic, Denmark, the Netherlands, Poland, Sweden and UK) was insufficient to require a review of the proposal. After being backed by the EESC, the proposal will now continue its passage through the Council (the Irish Presidency having announced that it will take work on it forward) and the European Parliament (with a first reading planned in November).

EP urges Commission to produce a draft Statute for a European mutual society

The European Parliament adopted a resolution on 14 March 2013 with recommendations to the Commission on a Statute for a European mutual society. According to the EP, mutual societies ‘play a major role in the Union's economy by providing health care, social services and affordable insurance services to more than 160 million European citizens, while they represent more than EUR 180 billion in insurance premiums and employ over 350,000 people’. Based on the outcome of a recent study on the situation of mutual societies in the EU, the EP asks the Commission to quickly submit a proposal allowing mutual societies to act on a European and cross-border scale. The EP highlighted that the regulation should not cover rules on employee involvement in the decision-making process.

European Social Dialogue

Failure of the revision of the working time Directive negotiations

Following attempts by and the failure of the Commission, the European Parliament and the Council to revise the Working Time Directive, the European social partners ETUC, BUSINESSEUROPE, UEAPME and CEEP launched negotiations in November 2011 on the revision of this directive. Following long and heated debates lasting almost a year, the ETUC Executive Committee decided that the ‘final offer’ from the employers was not sufficiently balanced and consequently did not make it possible to continue the negotiations as such. The ball is now back in the Commission’s court, although it is expected that the Commission will not launch new proposals for revision before end 2013 and perhaps not even before the European Parliament elections of 2014. For more information on ETUC positions see ETUC website.

Negotiations on a framework of actions on youth employment finalised

In March 2012, the European Social Partners adopted their fourth work programme to run until 2014, addressing youth and employment, as two of the main activities. With more than 22 per cent of young people unemployed, there is an urgent need to remedy this unacceptable situation. Negotiations on a framework of actions started on 18 September 2012 and further eight meetings took place from October 2012 till March 2013. On 9 April, the negotiation delegations were able to finalise the framework of actions, which will now be submitted to the respective decision-making bodies of ETUC, BUSINESSEUROPE, UEAPME and CEEP for final adoption. More information on the ETUC positions on “youth and employment can be found on the ETUC website.

Ad hoc working group on social partner involvement in EU economic and social governance set-up

In the same work programme, action point 8 states that ‘EU economic governance touches the competences of social partners, namely in issues like wages, pensions and labour costs which are at the heart of industrial relations systems in the Member States’. Therefore, the European social partners intended to ‘launch a reflection in the social dialogue committee with the aim of defining a shared vision on the consequences that the current debate on European economic governance will have on social dialogue at EU and national levels, and with a view to developing possible recommendations at relevant levels’. At a first reflection, which took place on 31 January 2013, it was decided to set up an ad hoc working group, which met on 20 March, and further reflections in view of coming to a joint statement on the issue are scheduled for 10 April and 17 May. For more information on ETUC positions see ETUC website.

Publications

ETUI publications

Cremers J., M. Stollt and S. Vitols (2013) (eds) A decade of experience with the European Company.

This book produced by the SEEurope Network provides a comprehensive overview of the legislation on the European Company (SE – Societas Europaea) and its history and development. It assesses the overall significance and impact of the SE on the business sector and on worker involvement in Europe and provides an outlook of the future of the SE. The publication also makes recommendations for policymakers regarding future revision of the SE legislation specifically, as well as European company law and corporate governance generally. more

The ETUI working paper summarises the results of an inquiry by the SEEurope network on the current legal framework and practices in 28 European countries regarding non-financial and sustainability-related reporting by European companies and the role and involvement of trade union representatives in this form of reporting. A free pdf download is available on the ETUI website.

Vitols, S. and J. Heuschmid (2012) European company law and the Sustainable Company: a stakeholder approach. Vol. II.

In this book, members of the GOODCORP network of researchers and trade unionists present their proposals for European company law which would encourage companies to follow sustainable, stakeholder-oriented strategies. Key proposals include: revising our understanding of the firm and its key stakeholders; strengthening stakeholder ‘voice’ in companies; increasing the transparency of companies through binding requirements for social and environmental reporting; and negotiating employee-friendly agreements with investors through collective bargaining. more

Multinational enterprises offer trade unions scope and organisational resources for strategic action to expand the positive aspects of working for a multinational uncovered by our research. This emphasises the need for international union networking, including improved interaction between European Works Councils and unions operating at the national and international levels. It is crucial for unions at national level to maintain or create industry-level collective agreements covering subsidiaries, first to spread the gains achieved in multinational enterprises – notably in terms of wages and training – and second, to improve conditions in those multinational enterprises where wage pressure policies exist. Available as pdf on the ETUI website.

Updated country reports: Clauwaert, S. and I. Schömann (2012) ‘The crisis and national labour law reforms’

The ETUI Working Paper published in 2012 (see also last News Bulletin) maps the labour law reforms in various European countries either triggered by the crisis or introduced using the crisis – wrongly – as an excuse. The complementary annex providing an analysis of the reforms on a country by country basis has now been updated and is available as pdf download.

Other publications

Based on database analysis and two case studies, this article examines the processes, outcomes and impacts of negotiations on employee involvement in SEs. Findings revealed different paths linked to the fact that negotiations are built on company-specific industrial relations practices and embedded in specific structural and organisational contexts. The article is available online, with the kind permission of both the author and the publisher.

European Parliament (2013) European Added Value Assessment of a Directive on the cross-border transfer of a company’s registered office

On June 2012, the JURI committee of the European Parliament requested a European Added Value Assessment of a potential 14th Directive. The study, which has been commissioned to Jeantet et Associés and London Economics/LIEP Consortium, focuses on both the legal and the economic effects of such a legal initiative on the cross-border transfer of company seats. The study and its annex are available online. The study and its annex are available online.

European Commission (2013) Industrial Relations in Europe 2012

The report reviews trends and developments in the relationship between workers, employers, their respective representatives and public authorities at national and EU level during 2010-12. It looks at how the continuing crisis and reforms implemented in response may be having a more fundamental impact on industrial relations, as conflict is increasing. In certain countries, fiscal consolidation has resulted in unfavourable settings for social dialogue, especially in the public sector, where reforms have been accelerated. Despite this the report concludes that structured social dialogue is still the right approach for building consensus and ensuring the sustainability of economic and social reforms.

Reports from ETUI conferences and workshops

Seminars on the ‘Sustainable Company’ project

In the first week of April two seminars took place to publicise the new book European company law and the Sustainable Company: a stakeholder approach (see description above in the section on ETUI publications). The first was hosted by the Swedish Confederation of Professional Employees (TCO) in Stockholm on 3 April, and the second took place at the University of Oslo on 5 April. A video of the seminar in Stockholm can be viewed online. more

EWPCC Conference 2013: 10 Years of SE – How far have we come?This year’s annual EWPCC Conference, held in Rome from 20-21 March 2013, reflected on the first decade of experience and research on SEs . The conference was attended by over 75 board-level employee representatives, SE-Works Council members, trade union officials, and academic experts. more

Within the framework of an ETUI project focusing on analysis of the implementation of the EWC Recast Directive 2009/38/EC into national law an expert workshop took place on 18 March in Brussels. The workshop consisted of presentations of the preliminary findings on the provisions transposing the directive into national law and subsequent discussions with participants. The ETUI is finalising a report on the topic to be published later in 2013.

IRES/ETUI seminar on board-level employee representation in FranceOn 14 March, European experts met in Paris at a seminar organised by the IRES with the financial support of the EWPCC to exchange views about the current system and future extension of board-level employee representation in France. Researchers, trade union officials and practitioners presented their analyses and experiences to put the legal initiative for disseminating this form of employee participation into perspective. more

SEEurope Research Network meeting in DublinThe ETUI’s SEEurope Research Network held its first country reporters’ meeting of the year from 28 February to 1 March in Dublin. In cooperation with the Irish Trade Union Congress a seminar on ‘Perspectives for worker involvement in Ireland’ was organised. On the second day, the SEEurope members exchanged views and experiences with colleagues from Eurofound on their work in the field of industrial relations. more

Scenario workshop on labour relations in the financial sectorAgainst the background of profound structural change and great uncertainty in the financial sector, the scenario workshop investigated on long-term prospects for employment and labour relations in the European financial sector over the next 20 years. The workshop (19–21 February, Leiden) brought together 25 employee representatives, shop stewards and trade union officials in the financial sector from different companies and countries. more